By Mark Ackman
GDAC, a crypto exchange in South Korea, was robbed by a group of hackers who stole crypto assets worth $13 million. The hackers targeted GDAC’s hot wallet on April 9 and got away with numerous cryptocurrencies.
According to statements made by the exchange on Monday, the stolen assets amount to almost a quarter of their total funds. The hacker group stole over 60 BTC, 359 ETH, 220,000 USDT, and 10 million WEMIX tokens.
This isn’t a new occurrence, as crypto theft has been on the rise within the past year. In just the last 18 months, cryptocurrency exchanges and platforms have faced notable cybersecurity breaches.
WEMIX Claims To Monitoring The Situation
The WEMIX tokens are native to the same-named blockchain and are used to power the blockchain gaming platform. The blockchain company informed users about the hacking attack on GDAC and stated that it was closely monitoring the situation.
The WEMIX representative team tweeted about the hack and gave links to announcements by GDAC that would provide further information.
The Risk Of Using Hot Wallets To Store Assets
Many crypto exchanges use hot wallets as a way to store funds that are needed for current trading activities and immediate withdrawals. While they offer some convenience, they also come with security risks.
In contrast to cold wallets, which keep assets offline, hot wallets are connected to the web. So, if the hot wallet is breached, it can contribute to major losses for the exchange as well as account holders.
Swunghwan Han, the CEO of GDAC, explained that the exchange’s servers and wallet system were blocked and suspended once the incident was confirmed.
As of now, GDAC’s response has been to collaborate with national and international cryptocurrency exchanges to recover the stolen coins and keep them from being laundered.
Moreover, GDAC also informed the police, the National Internet & Security Agency, and Korean Financial Intelligence Unit about the hack.
Rise of Crypto Theft
The current hack is a continuation of last year’s trends when crypto theft and related hacks surged in intensity. Based on statistics by Chainalysis, an analytics company, cryptocurrency assets worth $3.8 billion were stolen last year.
If you look at the history of cryptocurrencies, the hack on GDAC is the biggest loss within a single year. Currently, financial analysts believe that the North Korean hackers are the ones behind the attack.
Last year, Axie Infinity’s sidechain, Ronin Bridge, faced a $625 million hack. Meanwhile, Sushi, the decentralized finance protocol faced a $3.3 million hack.
The vulnerability of crypto exchanges is a major factor that investors must consider prior to buying crypto. Hardware wallets seem to be the safest way to store cryptocurrency since it’s not connected to the internet and thus, can’t be hacked.